HDFC issues India’s largest masala bonds to raise Rs 3,300 crore

HDFC, the country’s biggest private mortgage player, will raise Rs 3,300 crore by issuing the largest masala bonds in the country.

“Under the USD 750 million MTN programme, the Corporation earlier on Friday launched an issue of Rs 2,000 crore ($306 million) plus a greenshoe option ($198 million or Rs 1300 crore),” HDFC said in a statement.

Masala bonds or rupee-denominated bonds are those wherein an Indian company raises money from overseas investors in Indian rupees.

HDFC said it has received an “overwhelming response from 29 investors across Asia and Europe. The aggregate demand for the transaction was 2.16 times at Rs 4,315 crore ($657 million).”

The Rs 3,000-crore issue of unsecured rupee-denominated bonds bears a fixed semi-annual coupon of 7.35 percent per annum (better price than the previous 7.87 percent) and has a tenure of three years and one month maturing on April 30, 2020.

“The bonds are unrated and will be listed on the London Stock Exchange. This issue is the largest issuance of masala bonds out of India,” it said.

The Reserve Bank of India had granted HDFC permission to raise Rs 3000 crore in December after it exhausted its limit of Rs 5000 crore.

Last July, HDFC became the first corporate to issue masala bonds in order to raise Rs 3,000 crore at a coupon rate of 7.87 percent.